Naira scarcity looms as December deadline beckons
By Ralph Tathagata
In March, the Central Bank of Nigeria (CBN) announced that, in compliance with the order of the Supreme Court, naira notes remained legal tender alongside the redesigned banknotes until December 31. However, Nigerians across major cities of the country, especially in Lagos are expressing concerns over their inability to withdraw huge cash in their banks, raising fears of scarcity as experienced during the naira swap.
According to a recent trends in the social media space, Lagos, Abuja and other parts of the north are already experiencing the cash crunch. Following the trends, the Central Bank of Nigeria (CBN) reassured in a recent statement that both old and new naira notes remain legal tenders and urged Nigerians to continue using them in their day-to-day transactions.
The CBN, through its Director, Corporate Communications, Isa Abdulmumin, said, “The seeming cash scarcity in some locations is due largely to high volume withdrawals from the CBN branches by Deposit Money Banks (DMBs) and panic withdrawals by customers from the Automated Teller Machines (ATMs).
“While we note the concerns of Nigerians on the availability of cash for financial transactions, we wish to assure the public that there is sufficient stock of currency notes for economic activities in the country. The branches of the CBN across the country are also working to ensure the seamless circulation of cash in their respective states of operation.”
The statement added, “For the avoidance of doubt, while reiterating that there are sufficient banknotes across the country for all normal economic activity, we wish to state unambiguously that every banknote issued by the Central Bank of Nigeria (CBN) remains legal tender and should not be rejected by anyone, as stipulated in Section 20(5) of the CBN Act, 2007.”
Meanwhile, in Lagos, MARKETING EDGE intelligence on some commercial banks in the Central Business District (CBD) of Ikeja, observed that most of the banks’ Automated Teller Machines (ATMs) were running out of cash as queues gradually return. As a result, many people alternatively patronise Point of Sale (PoS) agents, who usually want to make a killing overnight under such emergency circumstances.
During the recently concluded Lagos International Trade Fair at Tafawa Balewa Square (TBS), some shoppers who turned out in large numbers were also stranded at the ATMs following their inability to withdraw cash.
Also, a PoS operator, who identified himself as Charles Nlewedim at the trade fair, expressed his difficulty in withdrawing huge volumes of money in the banks. Ironically, customers who complained that they were unable to draw cash because some banks’ ATMs were not dispensing money, blamed PoS agents for mopping up all the cash lodged at various ATMs.
What’s more? A report from Daily Trust revealed that the naira notes crunch is also affecting business transactions in local markets, especially in the northern part of Nigeria where buyers and sellers prefer to deal in cash instead of bank transfers.
While traders have been complaining of difficulties in getting cash to transact businesses in the north, POS operators said they had run out of cash.
It would be recalled that Nigerians across all strata experienced acute banknotes scarcity during the naira redesign policy as many people unfortunately lost their lives.
Whether the CBN would manage the looming naira crisis across the country by issuing adequate quantities to deposit money banks for onward circulation to bank customers is yet to be seen.
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